- Threat to Uniswap’s market sentiment arises due to FRENS token developer controversy
- UNI has, however, exhibited resilience amidst setbacks
Uniswap [UNI], a pioneering DEX within the DeFi sector, has consistently maintained its position as a dominant player in the space. However, recent developments involving the developer of the FRENS token has introduced an element of uncertainty in Uniswap’s market sentiment.
Read Uniswap’s Price Prediction 2023-2024
We didn’t start the “Fire”
In response to the negative exposure, Uniswap’s founder took to Twitter to address the situation, revealing that the individual responsible for the FRENS token had been dismissed from their role.
Wanted to let people know this person is no longer with the company.
Not behavior we support or condone. https://t.co/sxVowwIR3Q
— hayden.eth 🦄 (@haydenzadams) August 12, 2023
The individual in question, known as AzFlin, had been identified as the developer behind the meme token FrensTech (FRENS). Shortly after deploying the FRENS token, AzFlin executed a transfer of 14 WETH (equivalent to approximately $25,800) from the Base network and proceeded to liquidate the tokens acquired from the liquidity pool.
Allegations emerged that AzFlin engaged in a practice commonly referred to as “rug-pulling,” where liquidity is withdrawn from a project immediately after its launch. Investigations revealed that AzFlin accessed the funds through the HOP protocol, effectively removing the ETH liquidity, a sum of 14 ETH, that had been contributed as fees.
AzFlin, however, disputed the accusation of rug-pulling, acknowledging only the removal of 1 ETH worth of liquidity from the project.
Addressing this ridiculous FUD right now.
Yes I made this token. NO – I DID NOT RUG.
Liquidity was locked from the start. I removed 1ETH worth of liquidity that I provided with funds from my own dev wallet. https://t.co/np5Jxji9TZ
— AzFlin 🦎 (unemployment arc) (@AzFlin) August 12, 2023
While AzFlin denied a deliberate rug pull, he confirmed the sale of a portion of FRENS tokens sourced from the liquidity pool. He justified this action by asserting that the tokens had originally been acquired using personal funds.
Interestingly, the FRENS token incident is not an isolated occurrence within the Base network. In a similar fashion, the BALD memecoin saw significant interest and hit a market cap of $85 million, before falling victim to a rug pull executed by its deployer in July.
A slowdown in activity
Despite Founder Hayden’s efforts to address concerns and dispel fears surrounding Uniswap, the protocol experienced setbacks. Within a 24-hour timeframe, Uniswap’s activity plummeted by 27.3%, accompanied by a decline of 13.5% in the fees collected.
Source:token terminal
Conversely, UNI exhibited signs of growth as its price ascended from $5.793 to $6.15. Here, the surge in price can be attributed to a hike in the number of UNI holders over the past week.
Realistic or not, here’s UNI’s market cap in BTC’s terms
Source: Santiment